In which Five-Year Plan was the first four-sector model of economic growth adopted?

Correct option is B

Correct Answer:(b) Second

Explanation: The first four-sector model of economic growth in India was developed by the eminent statistician and economist Prasanta Chandra Mahalanobis and adopted during the Second Five-Year Plan (1956–1961). The four sectors identified in this model were:

1. Capital goods sector (investment/heavy industries)

2. Factory-produced consumer goods

3. Small and household industry-produced consumer goods (cottage industries)

4. Services, education, and health sector

Information Booster:

• P.C. Mahalanobis is widely referred to as the "father of modern statistics in India" and established the Indian Statistical Institute (ISI).

• The model's primary objective was to prioritize investment in the heavy/basic capital goods sector to lay down a strong domestic foundation for long-term industrial growth.

• This strategy led to the establishment of major public sector steel plants in Bhilai, Durgapur, and Rourkela.

• However, neglecting the primary sector eventually triggered a severe food grain shortage and foreign exchange crisis by the late 1950s.

Additional Knowledge:

• A. First Five-Year Plan (1951–1956): Formulated using the Harrod-Domar model, which highlighted the simple mathematical relationship between savings, investment, and GDP growth, with a critical focus on the agricultural sector.

• C. Fifth Five-Year Plan (1974–1978): Focused on poverty eradication ("Garibi Hatao") and self-reliance, utilizing an input-output model designed by D.P. Dhar.

• D. Eighth Five-Year Plan (1992–1997): Formulated after the landmark LPG (Liberalization, Privatization, Globalization) reforms of 1991, shifting focus toward human resource development and infrastructure.